MGF 3684

Business Strategy
Week 9
 What you need to know today

1. Board Presentation & Director’s 3. Philips Vs Matsushita Case

Evaluation Reports 4. Capstone Round 5 Debrief
2. Strategy & Structure

Concepts Case Studies MGF

3684

Concepts StratBusines
eg y s
Mgt

IT Security Vs
Take-aways Cybersecurity
What we will be learning this week?
Housekeeping
Announcements

• Xxxxx
• Xxxxx
• xxxxxx
Week 11 and 12 Board Presentation

During Tutorial, you tutor will advise you the schedule

 S E C T I O N 1

Board Presentation &

Director’s Evaluation
 Board Presentation & Report

Board Report is worth 15% of total unit assessment, due in week 10

Board Presentation (5%) is a visual summary of the key highlights

in the Board Report
You will need to submit one day before you present.

Director’s Report (5%) – each individual student role-play as a

director reviewing the 6 years performance of your allocated company
group
 Individual Director’s Evaluation Report
When your allocated company executive presents, you
need to evaluate their communicated highlights to
decide if you would renew the executive team’s
contract ?
The evaluation criteria are:
• Their major achievement(s) over the 6 years
• Their most disappointing or concerning aspect(s) of
their performance
• The biggest discrepancy or discrepancies between
what is claimed in the report against what you have
observed, and what issues should / could be
covered, but not taken up in the report
You also need to ask at least one, preferably more Qs
to further clarify your evaluation findings.
Report Marking Assessment Criteria:
1. Decision to renew or otherwise, with a strong and
concise justification statement that is linked to the
conclusion of your evaluation findings below.
(10% weighting)
2. Evaluation Findings
a) Critique of Major Achievements
(20% weighting)
b) Critique of performance concerns
(20% weighting)
c) Critique of biggest discrepancy or
discrepancies detected from what was
reported vs presented
(20% weighting)
3. 1 or more Question(s) Asked: Reason(s) for
Question(s) of Clarification and evaluation of given
response(s) to finalise decision making
(30% weighting)
 S E C T I O N 2

Strategy &
Structure
 Functional Structure

Top
Management

Purchasing Manufacturing Marketing Finance

Buying Plants Branch Accounting

units sales units units
 Product Division Structure
Headquarters

Division product Division product Division product

line A line B line C

Department Department Department Department

Purchasing manufacturing marketing finance

Buying Plants Branch Accounting

units sales units units
 International Division Structure
Headquarters

Domestic Domestic Domestic International

division division division division
General General General General
manager manager manager manager
Product line A Product line B Product line C area line

Functional units Country 1 Country 2

General General
manager manager
(product A, B, (product A, B,
and / or C) and / or C)

Functional units
Two Primary Patterns of
International Competition

Multi-country
Competition

Global Competition

13
Characteristics of Multi-Country
Competition

Market contest among rivals in one country not closely

connected to market contests in other countries

Buyers in different countries are attracted to different

product attributes

Sellers vary from country to country

Industry conditions and competitive forces in each national

market differ in important respects

14
Characteristics of Global
Competition
Competitive conditions across country markets are strongly
linked
 Many of same rivals compete in many of the same
country markets
 A true international market exists

A firm’s competitive position in one country is affected by its

position in other countries

Competitive advantage is based on a firm’s world-wide

operations and overall global standing

15
Pressures for Cost Reduction and
Local Responsiveness

 Pressures for Cost Reductions

 Pressures for Local Responsiveness

16
Pressures for Cost Reduction and
Local Responsiveness
High

Company Company
A C

Cost Pressures

Company
B

Low
Low High
Pressures for Local Responsiveness
17
International Business Strategy
Choice
 International Strategy
 Multi-domestic (or multinational) Strategy
 Global Strategy
 Transnational Strategy

18
Four Basic Strategies
High

Cost Pressures

International
Strategy

Low
Low High
Pressures for Local Responsiveness
19
Four Basic Strategies
High

Cost Pressures

Multi-
International domestic
Strategy Strategy

Low
Low High
Pressures for Local Responsiveness
20
International Strategy

Go where locals don’t have your skills.

Little adaptation. Products developed at home
(centralization).
Manufacturing and marketing in each location.
Makes sense where low skills, competition, and
costs exist.

12-17 21
Multi-domestic Strategy

Maximize local responsiveness.

 Customize the product and marketing strategy
to national demands.

Skill and product transfer.

Transfer all value-creation activities, no

experience curve rewards.

Good for high local responsiveness and low

cost reduction pressures. 22
Four Basic Strategies
High

Global
Strategy

Cost Pressures

Multi-
International domestic
Strategy Strategy

Low
Low High
Pressures for Local Responsiveness
23
Four Basic Strategies
High

Trans-
Global national
Strategy Strategy

Cost Pressures

Multi-
International domestic
Strategy Strategy

Low
Low High
Pressures for Local Responsiveness
24
Global Strategy

Best use of the experience curve and

location economies.

This is the low cost strategy.

Utilize product standardization.

Not good where local responsiveness

demand is high.

25
Four Basic Strategies
High

Trans-
Global national
Strategy Strategy

Cost Pressures

Multi-
International domestic
Strategy Strategy

Low
Low High
Pressures for Local Responsiveness
26
Transnational Strategy
Core competencies can develop in any of the
firm’s worldwide operations.

Flow of skills and product offerings occurs

throughout the firm - not only from home firm
to foreign subsidiary (global learning).

Makes sense where there are (equal) pressures

for both cost reduction and local
responsiveness.
27
Strategy, Structure, and Control

Global strategy – product division structure –

centralized control.

Multi-domestic strategy – worldwide area

structure – decentralized control.

International strategy – international division

structure – centralized control for core
competencies (e.g. R&D) and decentralized
control for operating decisions.
28
 S E C T I O N 3

Tutorial & Next

Week
Tutorial and Next Week (Week 10)

Tutorial:

We’ll discuss how strategy and structure evolve in the

international scene

Next week:

IBM case in Week 10 readings

No end-gaming in simulation!

Board report due

30
Next Week’s Lesson

Title